21 February 2018 TF50 (2018) 31 Commission to EU 27 Subject: Internal EU27 preparatory discussions on the framework for the future relationship: "Mobility" Origin: European Commission, Task Force for the Preparation and Conduct of the Negotiations with the United Kingdom under Article 50 TEU Remarks: These slides are for presentational and information purposes only and were presented to the Council Working Party (Article 50) on 15 February 2018. The contents are without prejudice to discussions on the framework of the future relationship. In December 2017, the European Council invited the Council (Art. 50) together with the Union negotiator to continue internal preparatory discussions on the scope of the future EU-UK relationship. The slides support those discussions. They are based on the April European Council guidelines which continue to apply in their entirety. Published on the TF50 website on 21 February 2018
Internal preparatory discussions on framework for future relationship Mobility AD HOC WORKING PARTY ON ARTICLE 50 (Seminar mode) 15 February 2018 1
Key parameters informing the discussion UK "red lines" o "After the UK leaves the EU, free movement will end but migration between the UK and the EU will continue" o "The UK will establish an immigration system that allows the UK to control numbers and encourage the brightest and the best to come to the UK" EU 27 guiding principles o A non-member of the Union, that does not live up to the same obligations as a member, cannot have the same rights and enjoy the same benefits as a member o The four freedoms of the Single Market are indivisible, and there can be no "cherry-picking" 2
UK withdrawal implications for mobility Phases/scenarios TRANSITION FUTURE PREPAREDNESS for the UK becoming a third country, including in a no deal scenario Aspects to consider Schengen border crossing Visa regime Migration Trade in services (mobility related aspects) Social security coordination 3
Transition If a transition agreement with the UK is reached (EUCO guidelines 15/12/2017 & Negotiating Directives 29/01/2018) UK applies all acquis and continues to participate in the Internal Market for a limited period. Status quo would be maintained in all areas, except for certain rights linked to EU citizenship: elections to the European Parliament local elections Citizens' Initiative 4
Consequences of the withdrawal of the United Kingdom from the EU I. Default framework: EU legal migration acquis 5
Scope Principles Decision making Supervision & enforcement Remedies The Single Market free movement of persons EU citizens, EEA nationals and Swiss citizens Integrity of the Single Market 4 freedoms together Development: workers, self-employed all citizens (incl non-active) rights: Treaties, EU Charter of Fundamental Rights, Directive 2004/38/EC (all citizens), Regulations (EU) 492/2011 (workers) or (EC) 883/2004 (social security) Supremacy and direct effect of EU law Rich "ecosystem" built on EU law with important developments via case law of the Court of Justice the Commission the Court of Justice and national courts Compliance, infringement procedures 6
Consequences of the UK becoming a third country End of the Single Market regime: the Free Movement Directive (2004/38/EC), EU free movement of workers rules (Reg. 492/2011) or the social security coordination rules no longer apply EU citizens moving to UK UK migration rules to apply (rules for the post-withdrawal period are yet to be defined) UK nationals moving to EU considered "third-country nationals" EU legal migration law will apply national law will apply in areas not covered by EU law Default rules on: entry visas and co-ordination of social security schemes (to be covered below) 7
Consequences of the UK becoming a third country Who is covered by the EU legal migration acquis? Family members Directive 2003/86/EC Long-term residents Directive 2003/109/EC Single Permit holders Directive 2011/98/EU Students and researchers Directive (EU) 2016/801 (recast) EU Blue Card holders Directive 2009/50/EC Seasonal workers Directive 2014/36/EU Intra-corporate transferees Directive 2014/66/EU Who is NOT covered by the EU legal migration acquis? Other categories (self-employed, low and medium skilled economic migrants (except seasonal workers), international service providers (except ICTs), jobseekers, family members of non-mobile EU citizens, retired persons ) will be covered by national law, as well as rules on regularisation. 8
Current EU legal migration acquis (applicable by the EU25 to all third country nationals) Directive Provides for specific admission conditions? Sets procedures (applications, deadlines...)? Family Reunification yes yes Long Term Residents Single application procedure for a single permit to reside and work (Single Permit) Students and Researchers (also covers trainees, volunteers, school pupils and au pairs) yes, conditions for acquiring the status Provides for equal treatment (with limitations)? rights granted through the Single Permit Directive Allows the thirdcountry nationals to bring family members? yes (purpose of the Directive) Allows intra EU mobility? yes yes no yes no yes yes no no yes yes yes yes for researchers no yes for students and researchers EU Blue Card yes yes yes yes yes Seasonal Workers yes yes yes no no Intra-Corporate Transferees yes yes yes yes yes 9
EU law vs current UK rules (examples) EU rules UK rules Fees Average 140 Between 230 and 2.676 Income requirement for consolidated status after 5 years Family reunification Intra-corporate transferees Stable and regular resources (national minimum income) No economic needs test Stable and regular resources (national minimum income) Optional language test Residence permit at least 1 year No financial resources requirement No labour market test Up to 3 years No possibility for consolidated status At least 35.000 Economic needs test Higher income of the sponsor Compulsory language test Permits less than 1 year Financial resources requirement Labour market test Up to 5 years Possibility for consolidated status Students Case by case financial resources Fixed financial resources 10
No reciprocity requirement There is no reciprocity requirement with regard to the rules on treatment of third country nationals in the EU and EU nationals in the respective third country EU acquis sets out equal minimum rights of all third country nationals that can be topped up through bilateral agreements 11
Consequences of the UK becoming a third country - summary EU citizens UK UK nationals EU Third country nationals Will be subject to UK immigration rules (future UK immigration rules are unknown today) No coordination or equal treatment regarding social security rights/benefits Third country nationals Will be subject to entry requirements under the Schengen Borders Code Will be subject to EU & national legal migration rules No coordination regarding social security rights/benefits (but: some portability rights in relation to pensions) 12
Consequences of the withdrawal of the United Kingdom from the EU II. Default framework: GATS Agreement mode 4 in relation to service providers 13
Consequences of UK withdrawal GATS fall-back Professional mobility remains possible for service providers falling within the Mode 4 categories defined in GATS, for the sectors covered For those persons, labour market tests ("economic needs tests") and numerical restrictions could be partially avoided Default rules on visas and immigration may present hurdles to trade and may differ between Member States Service suppliers and their employers do not benefit from social security coordination or any right to equal treatment Labour market rules of individual Member States apply in full Lack of recognition (e.g. of qualifications) may imply supply of a service only possible based on host state qualifications Mobility of persons not fitting within GATS follows the regime applicable to third-country nationals partly harmonised (for transferees) and partly set by individual Member States 14
What is not covered? [depth] Any visa or immigration measure, provided it does not nullify or impair the benefits under the agreement Labour market rules and standards or any equal treatment provisions Social security coordination, nor any equal treatment provisions Rules regarding double taxation Who is not covered? [width] What is not in GATS? Recently recognised categories of skilled service providers (trainees, independent professionals, various short-term business visitors) Service providers with low- and medium-level qualifications Subcontracting or employment-agency type work Anyone who is not a service provider or an investor (e.g. jobseekers, workers, students) 15
GATS key provisions on Mode 4 General Agreement on Trade in Services (GATS) applies to all 164 WTO members It covers the entry and temporary presence of natural persons for business purposes so-called Mode 4 Covers all service sectors Defines each category of persons Specifies limited duration of stay Parties can schedule "reservations", horizontally and per sector Prevents "economic needs tests" ("labour market tests") (subject to reservations) Prevents numerical restrictions (subject to reservations) It sets only few limits on policy choice, leaving Parties the right to regulate No direct effect 16
Mobility categories in GATS Intra-corporate transferees (ICT) (managers, specialists) Business visitors for establishment purposes Subsidiary, branch, representative office Enterprise, investor Business visitors: Service Sellers Specific activity (negotiating or concluding a sale, no direct sales) Contractual service suppliers (CSS) Contractual relationship for service provision with final consumer 17
What does Mode 4 under GATS cover? Mode 4 Category Key elements of the definition Length of stay Sectors covered Transferees Intra-corporate transfer of managers (senior position) or specialists (essential uncommon knowledge) Up to 3 years All GATS services sectors, subject to reservations Visitors: establishment Senior position, purpose setting up a company, no remuneration in the host country, not providing a service themselves Up to 90 days All GATS services sectors, subject to reservations Visitors: sales Negotiating or concluding a specific sale. Not selling goods or services directly to the public, no remuneration in the host country Up to 90 days All GATS services sectors, subject to reservations Contractual service suppliers Employment by foreign enterprise who has a contract with a client in host country, university degree, qualifications, 3 years of experience, remuneration in the host country Up to 3 months per year Limited sectorial coverage (enumerated), subject to reservations 18
Future: existing models and rules & specific issues for consideration I. Existing models of cooperation with third countries, including mobility 19
Business persons Selfemployed Workers Family members Students Researchers All other categories Scope of different models visualised * Provides a definition Prevents quotas GATS FTA No economic needs test Provides rules on visa/migration Has labour market rules Single Market Social security coordination (*) For illustrative purposes; the grid is not identifying individual policies 20
Mobility arrangements in existing models EEA Switzerland Turkey FTA Includes all four freedoms, including free movement of persons and services Full equal treatment with nationals Social security coordination Subject to EFTA Court and a supranational governance structure Free movement of workers, selfemployed and non-active persons Service provision limited to 90 days per calendar year Full equal treatment with nationals Social security coordination Linked by guillotine clause to other agreements Unsatisfactory governance mechanism, to be upgraded Confers rights to workers already in the EU Standstill effect Limited rights for service providers Equal treatment as regards working conditions Limited social security coordination Service providers and investors, not workers Binds existing provisions Visa, immigration, labour market carve-out No equal treatment provisions No social security coordination No direct effect Disagreements on mobility provisions subject only to State-to-State dispute settlement 21
Mobility categories in recent EU FTAs Green/italics: improvements as compared to GATS Intra-corporate transferees (ICT) (managers, specialists, trainees) Business visitors for establishment purposes Subsidiary, branch, representative office Investor Enterprise, investor Short-term business visitors (STBV) One of 11 specific activities Self-employed Contractual service suppliers (CSS) Independent professionals (IP) Contractual relationship for service provision with final consumer 22
What does the Mode 4 chapter of a typical FTA cover? Green/italics: improvements as compared to GATS Mode 4 Category Key elements of the definition Length of stay Sectors covered Transferees Intra-corporate transfer of managers, specialists or trainee employees. University degree required for trainees. Up to 3 years (mgr/spec), up to 1 year (trainee) All sectors committed under investment liberalisation, subject to reservations Visitors: establishment Senior position, purpose setting up a company, no remuneration in the host country, not providing a service themselves Up to 90 days All sectors committed under investment liberalisation, subject to reservations Investors Establish, develop or administer an investment; substantial capital Up to 1 year All sectors committed under investment liberalisation, subject to reservations Short-term business visitors Limited list of allowed activities (purchase, sales, installation, maintenance, training, market research ). Not selling goods or services directly themselves, no remuneration in the host country. Up to 90 days All sectors covered by the agreement (i.e. also non-services), subject to reservations Contractual service suppliers Employment by foreign enterprise who has a contract with a client in host country, university degree, qualifications, 3 years of experience, remuneration in the host country Up to 6 months (1 year in CETA, Japan) Limited sectorial coverage (enumerated), subject to reservations Independent professionals Self-employed, obtained a bona fide contract, university degree, professional qualifications, 6 years of experience Up to 6 months (1 year in CETA, Japan) Limited sectorial coverage (enumerated), subject to reservations 23
How does an FTA improve on GATS? Additional categories of service providers and investors, as well transferees' spouses Longer duration of stay Fewer reservations in the schedule (so, fewer possibilities to introduce labour market tests) Additional sectors opened up to contractual service suppliers Substantial number of permitted activities for short-term business visitors No prior authorisation obligations for short business visits, except if it is a formality or it is listed in the schedule In practice, for Mode 4, even an ambitious FTA like CETA does not result in markedly better treatment than what is already accorded unilaterally. The added value is in "binding" (to prevent backsliding) and in transparency. Most favoured nation clause does not apply to Mode 4 (but CETA has it 24 for measures affecting the "stay" (not the entry) of persons covered)
What is not covered? [depth] Any visa or immigration measure, provided it does not nullify or impair the benefits under the agreement Labour market rules and standards or any equal treatment provisions Social security coordination, nor any equal treatment provisions Rules regarding double taxation Who is not covered? [width] What cannot be done through a typical EU FTA? Service providers with low- and medium-level qualifications Subcontracting or employment-agency type work Anyone who is not a service provider or an investor (e.g. jobseekers, workers, students) 25
Future: existing models and rules & specific issues for consideration IIa. Specific mobility related issues: visa regime 26
Consequences of the UK becoming a third country default For EU citizens visiting the UK: uncertainty about future UK visa regime applicable to EU citizens the current UK visa-free regime allows a longer period of stay than Schengen (6 months vs 90/180 days under Schengen) the current UK visa-free regime does not allow for studies (over 30 days) or paid and unpaid work 27
Consequences of the UK becoming a third For UK citizens: country: default EU Visa Regulation (539/2001) short-term stays (90/180 days) in EU Member States (excluding Ireland) and Schengen Associated countries: 2 annexes: Annex 1: list of visa-required countries / territories Annex 2: list of visa-free countries / territories No 'default rule' on classification in Annex 1 or 2 political decision and legislative amendment is needed Exception: even for visa-free nationals, Member States can require visa for persons 'carrying out a paid activity during their stay' 28
Preparedness Annex I or Annex II based on full reciprocity and nondiscrimination Cf. reciprocity mechanism in Regulation (EC) No 539/2001 Length of visa-free stay - 90 days in any 180-day period (Schengen standard rule) vs 6 months (UK standard rule) Exception for paid activity or studies 29
Future: existing models and rules & specific issues for consideration IIb. Specific mobility related issues: social security 30
Introduction: current rules Regulation (EC) No 883/2004 Regulation (EC) No 987/2009 Regulation (EU) No 1231/2010 (Regulation (EC) No 859/2003) Ensure free movement within 32 countries Coordination, not harmonisation Administrative Commission
Current rules: core principles Equal treatment with nationals Only legislation of one country applies = no gap in coverage or double-contribution Aggregation = adding together past insurance periods Export of cash benefits Wide personal and material scope 32
Default: no social security coordination agreement Third country nationals coming to the EU are subject to the social security legislation of the receiving Member State if they are in a situation involving two Member States the coordination rules apply within the EU Export of benefits within EU Aggregation of EU periods Equal treatment EU citizens going to a third country are subject to the social security legislation of the third country 33
Existing agreements: full social security coordination agreement Agreements on the European Economic Area and with Switzerland consist in the application of the current EU rules for all social security branches update mechanism - changes to the EU rules are then taken on board in the Agreements by amending their Annexes status of observers in the Administrative Commission 34
Existing agreements : limited social security coordination agreement Exists for: Albania Algeria Bosnia and Herzegovina Former Yugoslav Republic of Macedonia Israel Montenegro Morocco San Marino Serbia Tunisia Turkey No standard agreement Only provisions with direct effect currently apply 35
Existing agreements : limited social security coordination agreement Main issues Export of pensions (sometimes other benefits, like those for accidents of work or occupational diseases) to and from the third countries Aggregation of periods concluded by the third country nationals in different EU Member States (but not of periods concluded in a third country) Equal treatment provided in some agreements 36
Social security coordination - preparedness Documents issued for a period beyond the specified date certifying that: a person is covered by a social security legislation (A1) a person is entitled to unforeseen medical care (EHIC) They have declaratory nature and cannot maintain rights not protected by the Withdrawal Agreement and/or a future agreement 37
Summary UK applies EU acquis and is part of Single Market Exception: political rights linked to EU citizenship UK out of EU Institutions and bodies Transition Future Schengen border crossing Visa regime Migration Trade in services (mobility related aspects) Social security coordination Stakeholders' awareness and adjustments Visa regime Social security coordination Preparedness 38